Now is the time to buy capital assets. Section 179 of the U.S. Internal Revenue Code provides tax benefits for businesses that purchase qualifying equipment, including forklifts. Thanks to the 2017 tax legislation, businesses have been able to deduct a significant amount of 'bonus' depreciation in the year they buy and place an asset into service.
In 2023, the maximum depreciation is $1.16 million. Businesses can deduct 80% of the asset in the year you put it into service and must then depreciate the remaining 20% over the asset's life. In 2024, the first-year deduction falls to 60% of the asset price and ultimately falls to 20% in 2026. The takeaway is to maximize that first-year deduction and step up your equipment purchases this year.
How to Calculate Your 2023 Section 179 Deduction?
The advantage of the Section 179 tax deduction is the ability to increase your upfront tax savings. Your overall savings can vary - the 2023 Section 179 Deduction Calculator can help you estimate your tax savings for 2023.
Tax laws and regulations can change, so it's essential to consult with a tax professional or accountant who is up to date with the latest tax codes and can provide guidance specific to your business and tax situation.